Consolidating financial statement

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The consolidation was friendly in nature and lessened overall competition in the pharmacy marketplace.A consolidation differs from a merger in that the consolidated companies may also result in a new entity, whereas in a merger, one company absorbs the other and remains in existence while the other is dissolved.This approach may combine competing firms into one cooperative business. moved to sell the pharmacy portion of its business to CVS Health, a major drugstore chain.As part of the agreement, CVS Health intended to rebrand the pharmacies operating within Target stores, changing the name to the Minute Clinic.To consolidate is to combine assets, liabilities and other financial items of two or more entities into one.In the context of financial accounting, the term consolidate often refers to the consolidation of financial statements, where all subsidiaries report under the umbrella of a parent company.Within the consumer market, consolidation includes using a single loan to pay off all of the debts that are part of the consolidation.

This is used when the parent company holds a majority stake by controlling more than 50% of the subsidiary business.For example lets say we have Parent company P and subsidiary companies S and T. S would record revenue of ,000 and T would record expense of ,000.However when P consolidates the f/s P would eliminate that sale as an inter-entity transaction, if not, then revenue and expenses would be over stated by ,000.Parent companies that hold more than 20% qualify to use consolidated accounting.If parent company holds less than a 20% stake, it must use equity method accounting.

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